Bulgaria

June 2011

GDP DEVELOPMENT - Bulgarian GDP grew by 0,4% in Q1/2011 quarter-on-quarter.

EXPORTS – Bulgarian exports increased by 73% in 1/2011 y-o-y.

INFLATION – Bulgaria recorded an inflation of 4,6% in 3/2011 tying with Hungary on the third highest inflation level in EU27.

CAR SALES – Bulgarian car sales grew by 17% in Q1/2011 y-o-y. In 4/2011 car sales grew by 36%, which is fourth highest figure within EU.

AGRICULTURE - Chinese companies have shown interest in investing into Bulgarian agriculture. Tianjin State Farms Agribusiness Group Company is seeking to buy or rent land for growing corn and forage crops, and to export the produce to China.

BEVERAGE INDUSTRY - Coca-Cola has selected Sofia from among 14 cities in Europe as the location of its shared services center for human resources and financial services. The center will be opened in the fall of 2011 and employ 200 persons.

AVIATION - Bulgaria will launch a tender to find an investor for the Sofia Airport. The prospective investor would be asked to take up the airport's upgrade and the repayment of loans to the European Investment Bank and the Kuwaiti Fund for Arab Economic Development. The airport's total debt stood at 42 M€ at the end of 2010.

ENERGY - French energy utility GDF Suez is considering a 100 M€ investment into four biomass power units in Bulgaria. Spanish and Bulgarian companies have also shown interest in the area.

ENERGY - Lukoil Ecoenergo and Italian ERG Renew signed an agreement in 5/2011 to develop wind and solar energy capacities in Bulgaria and Romania and later in Ukraine and Russia through a joint venture named LUKErg Renew, will be headquartered in Vienna.

March 2011

GDP DEVELOPMENT - Bulgarian economy is expected to register 3% growth in 2011.

M&A - The value of M&A deals in Bulgaria in 2010 was 2 Bn €, which is half of the 2009 level. During 1-10/2010 only 0,7 Bn € worth of M&A transactions were made.

CAR SALES - The sale of new cars in Bulgaria was 65 % lower in 1/2011 than two years earlier.

REAL ESTATE - Residential property prices in Sofia declined 10,6 % on average in 9-12/2010 yo-y and by 1.3 % against Q2/2010.

REAL ESTATE - A group of Estonian businessmen who invested a total of 12 M€ into the Bulgarian real estate fund and which invested the money in 2005 to 80 ha land area in Sofia region have started action to save their investment.

TRANSPORTATION – EU will support construction of metro in Sofia with 250 M€.

FOREIGN DIRECT INVESTMENTS – Bulgarian ”National Company Industrial Zones” and the Qatar Investment Authority will set up a joint venture with 360 M€ capital to be invested into Bulgarian agriculture, real estate, tourism, finance and other interesting areas. The capital is provided by the Qatar Investment Authority.

AUTOMOTIVES - Turkish glass maker Sisecam, the owner of Trakia Glass Bulgaria, opened its fourth plant. The new 18 M€, 130 employee facility will produce 14 M€ worth of motor vehicle glass for Bulgarian and export markets.

RETAIL - Belgian Delhaize paid 930 M€ for Serbian Delta Maxi Group and asumed a debt of 300 M€. Delta Maxi runs 450 stores in 5 countries in South-Eastern Europe among them the Piccadilly retail stores in Bulgaria. With the move, Delhaize adds to its already-existing Greek and Romanian branches.

RETAIL - Trans Balkan Investments Ltd planning to sell electronics retailer TechnomarketDomo (TMD) with business in Bulgaria and Romania.

December 2010

GDP - Bulgaria's GDP increased by 0,2% in Q3/2010 y-o-y after adjusting to seasonal variations.

UNEMPLOYMENT – In Q3/2010 unemployment rate was 9,5% being up by 2,8% y-o-y.

CAR SALES - The decline in Bulgaria's new car sales decreased in October, slowing to 33% on the year compared to 38% a month earlier and about 40% at the beginning of 2010.

M&A - The Bulgarian M&A market shows the first signs of recovery, driven by the sale of the first national private television bTV and the acquisition of cable operators Megalan Network and Spectrum Net by mobile operator Mobiltel. The recovery is attributed also to the purchase of 38% in the Bulgarian animal health company Huvepharma by Citi Venture Capital International (CVCI) and the acquisition of Bulgarian coffee shop chain Onda Coffee by Torino-headquartered Lavazza Coffee Shops Srl (LCS) in a 6 M€ deal.

OUTSOURCING - The value of the Bulgarian outsourcing market is currently estimated at 100-150 M€ a year.

STEEL INDUSTRY - Bankrupt steel giant Kremikovtzi will be auctioned with a starting price of 288M€, which according to trade unions and analysts is far below the market price.

BANKING - Belgian financial group KBC has acquired CIBank by buying out the remaining 16% and delist the company from the Bulgarian Stock Exchange.

TELECOM – Ownership of Bulgaria's top fixed-line operator Vivacom is in play after US insurance giant AIG put its share on sale. The debt restructuring discussions between Chinese and Dubai owners are to decide the 2,9 million subscriber telco’s future.

ENTERTAINMENT - Trans Balkan Investments Limited announced it has signed a preliminary agreement for the sale of Urvich, the former cinema site, with an unnamed Bulgarian real estate development company.

REAL ESTATE – Prices of properties in Sofia have been stabilized. The main reason for the stabilization is the reduced construction of new apartments. Another reason is the resumed crediting. The average price for apartments in Sofia in the Q3/2010 was 840 €/m2.

REAL ESTATE – US Rockefeller Group is said to be in talks to buy a controlling stake in property fund manager Europa, which has repeatedly declared its interest in the Bulgarian market. The company says it is planning to invest over 100 M€ in key markets like Romania, Bulgaria, Turkey and the Western Balkans.

REAL ESTATE - Cleves, the luxury Sofia apartment rental company, has acquired an outstanding new building in the Iztok borough of Sofia with 34 apartments and a Class A suite of offices. The building is part of the Este Home and Spa project developed by Este Properties EOOD. The Cleves deal is valued at 10 M€.

AUTOMOTIVES - UK investment fund Quorus Ventures will open Bulgaria's first factory for electric cars by the end of 2010. The factory is going to produce two types of electric cars at first – family-type and sports-type. They will be able to run for 300 km with one charging of their batteries; the expenditures per 100 km will be about 1,5 €.

AUTOMOTIVES - Chinese Great Wall Motor Co and Bulgarian Litex Motors will start production in Northern Bulgaria, in 2011. The plant will have an annual production capacity of 50 000 units and assemble four models – a sports utility vehicle (SUV), a pickup and two passenger car models. The total initial investment is around 80 M€, potentially reaching 300 M€ if the project is successful.

AUTOMOTIVES - Foreign companies have shown their eagerness to assemble electric cars in Bulgaria. A Russian investor has shown interest in abandoned production facilities in Plovdiv, which previously was used to produce lorries. The site could be used for assembling minibus taxis and electric buses. A French company has stated that it wants to start electric car production in Stara Zagora, southern Bulgaria.

RETAIL – Although Bulgaria was again among the EU member states to register some of the steepest declines in retail sales in September, Bulgarian households have become more optimistic and project an improvement in their financial situation over the next 12 months. Bulgaria recorded 4,7% decline in retail sales on an annual basis.

RETAIL - German discount retailer Lidl opened its first 11 outlets across Bulgaria. In 2010, Lidl reached an agreement to acquire the Bulgarian and Romanian business of German Plus. The deal, stipulating the purchase of 23 Bulgarian and 96 Romanian stores, has already been cleared by the antitrust regulators of the Bulgaria and Romania.

RETAIL - The next shopping malls to be opened in Sofia will be giant for Bulgarian standards – of over 70 000 m2 of commercial space. The future Paradise Center mall will be opened at the end of 2012 on an area of 3,6 hectares on the Cherni Vrah Probably the largest shopping mall in Sofia will have total commercial space of 75 000 m2. Another large mall – with 72 000 m2 of commercial space – will be opened about a year later by Danaos Development, and will located next to the future IKEA store.

RETAIL - German discount supermarket Aldi, known for its aggressive price policy, is considering the possibility of stepping on the Bulgarian market. The company has registered a subsidiary in Bulgaria through its Austrian chain, branded as Hofer.

RETAIL - Raiffeisen bank has approached the Bulgarian antitrust commission for permission to acquire a full stake in Miller Mall Varna, which owns Mall Varna in the eponymous northern Black Sea city. The Mall Varna was constructed by the Bulgarian Interservice Uzunovi Jsc and opened in the summer of 2008. Shortly after it was acquired by the Scottish Miller Developments, a subsidiary of Miller Group.

ENERGY - New electric and heating power plant will be constructed by Bulgaria's Austrian-owned power utility EVN Bulgaria near the Plovdiv North Heating Plant. EVN plans to invest 51 M€ in the new electricity and heating plant, which will be the most modern cogeneration not only in Bulgaria, but also in the Balkans. The new facility will be producing 50 MW electrical power and 54 MW heating power.

ENERGY - Austrian companies have shown interest in taking part in the project to build a second Bulgarian Nuclear Power Plant (NPP) in the Danube town of Belene. Austrian businesses can become subcontracts in the construction.

ENERGY - Russia's state energy company Inter RAO will most likely pay 600 M€ to Italy's Enel SpA for a majority stake in Bulgaria's Maritsa East 3 coal power plant.

ENERGY - German company Siemens is most likely the new strategic investor in Bulgaria's Belene nuclear power plant. The CEO of Bulgaria's National Electric Company NEK Krasimir Parvanov said there was a possibility that German energy company RWE could re-consider its decision to withdraw from the Belene project.

ENERGY - Russian Mechel OAO has acquired another 51% stake in the heating and power plant in the Danube town of Russe, northern Bulgaria, boosting its interest to 100%. Mechel paid 52 M€ to raise its stake in the plant to 100% from the previous 49%.

ENERGY - Korean companies are preparing to invest in Bulgaria's energy sector, including in renewable energy. South Korean have also shown interest in taking part in the modernization of Bulgaria's electricity network. At the same time, there is also interest on part of Korean construction and engineering firms considering Bulgarian infrastructure projects.

September 2010

GDP DEVELOPMENT - Bulgaria's economy shrank by a real 1.5% y-o-y in the Q2/2010, the lowest figure recorded since the country entered a recession in the first quarter of 2009. Bulgaria’s economy is likely to continue to contract in the second half of this year and may fail to return to growth earlier than next year.

COUNTRY RATING - Moody's rates Bulgaria as the only country in Europe and Middle Asia with a positive outlook of sovereign credit. Standard & Poor’s gives Bulgaria a stable outlook at BBB.

CARPENTRY INDUSTRY - An Austrian company has announced plans to invest 50M€ to form a joint venture with Bulgaria Furniture & Office. Plans include building a factory in Russe and stores in most of the regional centers to cover the whole country.

CONSTRUCTION MATERIALS - Knauf announced it has put into operation its 62M€ plasterboard plant in Bulgaria.

TELECOM - Sale of Vivacom, Bulgaria's dominant telecoms provider, to Asian PCCW, is expected to be finalized in the short term. Li is to invest 500M€ in the company over the next five years.

RECYCLING - The first Bulgarian factory for the recycling of old electric appliances and equipment, the largest and most modern of its kind in Eastern Europe, was opened in the town of Novi Iskar near Sofia. The Bulgarian company Nadin Jsc is the owner and operator of the new plant, and has invested 26M€ in its construction. It has created 150 news jobs.

AVIATION - Lufthansa Technik Sofia will invest in the construction of new facilities for aircraft overhaul and maintenance near Sofia Airport. By to date Lufthansa Technik has already invested more than 25M€ into modernization of the maintenance facility and employee training.

ENERGY – The US based AES Corp. is waiting to receive the necessary permits to start construction of a 310M€ solar power plant with a capacity of 80 megawatts in Bulgaria.

ENERGY - The Czech-owned electric power utility CEZ will invest 1 Bn€ in a renovation of the “Metro” subfeeder in Sofia allowing development of new residential and business projects in northwestern region.

ENERGY - French energy company GDF Suez is considering investing 5M€ in a biomass plant in the Bulgarian mountain resort of Bansko.

RETAIL - Bauhaus is in the final stages of signing a contract for the land where it will build its first, 20,000 m2 hypermarket in Sofia.

RETAIL - British clothing chain Next will take the wraps off its first Bulgarian store, in Sofia’s The Mall shopping centre, on September 1 2010. British chain plans to open more Bulgarian units, including a home furnishing store.

REAL ESTATE DEVELOPMENT – Austrian Immorent will invest 13M€ to develop a 10-story, 10,340m2 building in Sofia.

REAL ESTATE DEVELOPMENT – The stock of contemporary shopping mall space in Bulgaria doubled to reaching 452,000m2 in the first six months of 2010 as five new shopping malls were opened. Another five shopping malls are expected to open by the end of 2010, which will add another 126,000m2 to the market.

June 2010

RETAIL - Ikea started building its new store in Sofia. It will cover 30 000 m2 and will have a 1200-car parking lot. It is scheduled to open in the second half of 2011, and expects to receive 1.6 million shoppers in the first year. Ikea plans to build its second Bulgarian store in the coastal city of Varna.

AUTOMOTIVE - Bulgaria records sharpest car sales decline in Europe in April. Only 1201 vehicles were purchased in April 2010 in Bulgaria, (50.8% fewer than April last year) which was the worst in Europe. In the first quarter, Bulgaria accounted for the third steepest decline after Romania with 56%, and Hungary with 52%. A total of 4557 vehicles were sold in Bulgaria in Q1, as opposed to 8543 in the first quarter of last year.

GDP DEVELOPMENT - The fall of Bulgaria's GDP slowed to 3.6% on an annual basis in the first quarter of 2010 from 5,9% in the previous quarter. It marks one of the sharpest fall in GDP among European Union member states. Bulgaria's budget deficit increased to 86M€ in the first three months of 2010 due to a fall in revenues and a rise in spending for social payments.

LOGISTICS - Schenker officially opened its new and modern logistics terminal on May 4, even though the facility has been operational since the beginning of March 2010. The complex, which is in Bozhourishte, near Sofia, is close to the international road linking Sofia and Belgrade. The new Schenker facility is a 10M€ complex, spanning more than 48 000m2 of land, with a logistics warehouse of 3000m2, an office complex of 3500m2, a 2000m2 cross-docking hall, both equipped with 30 loading bays with hydraulic ramps.

WATER SUPPLY - Several companies, including French ones, were interested in acquiring Sofia's water utility company Sofiiska Voda. Financial offers had been tabled for the Bulgarian company, which is a subsidiary of the British United Utitlies.

RETAIL - After two years' construction, Sofia's Serdika Center, dubbed the biggest shopping mall in Bulgaria, opened for business on March 16 2010. The total investment for Serdika Center is 220M€. Serdika Center is designed to be one of the largest shopping malls in Sofia, encompassing 50 000m2 of trade area and 35 000m2 of office space. It will have more than 1600 parking spaces beneath and above the centre.

CONSTRUCTION - Over 20 Austrian companies have expressed strong interest in participating in the construction of the Bulgarian road and railroad infrastructure. Bulgaria must benefit from the Austrian experience in absorbing funds from the EU operational program “Transport”. Bulgaria must realize projects in the amount of 990M€ by 2013 from the EU program. In the 2014 – 2020 period the country will receive an additional 1.3B€ in EU financing.

FOREIGN DIRECT INVESTMENTS - Torino-headquartered Lavazza Coffee Shops Srl (LCS) has stepped on the Bulgarian market by closing the acquisition of local coffee shop chain Onda Coffee in a 6M€ deal. Onda Coffee Break has eleven coffee shops in the Bulgarian capital Sofia.

CONSTRUCTION & REAL ESTATE - Bulgaria is among the five European states with the largest amount of commercial space under construction. opening of the new shopping malls in 2010 and 2011 will lift Bulgaria up in the ranking of commercial space per 1 000 persons; Bulgaria is currently the next to the last in Europe with only 28,2m2 of commercial space per 1 000 persons. Some 300 000m2 of commercial space are to be opened in 2010.

RETAIL - Billa Bulgaria plans to open 20 new supermarkets in the country this year. The thirteenth outlet of the company in the capital Sofia, which will be located at Vladimir Vazov boulevard, will be inaugurated at the end of March and will spread over 800m2. Total investment into the country over the 2010-2014 period is reported to be as much as 250M€.

ENERGY SECTOR - The biggest solar panels manufacturer on the Balkans, Solarpro Holding, begins the construction of 2 new solar parks in the Bulgarian towns of Malko Tarnovo and Devnya. The park in Malko will be located on an area of 112 decares and its planned capacity is 2.4 Mwp. The Malko Tarnovo park will be built in 8 months and will connect to the country's electric power network by the end of 2010. Several weeks ago, Solarpro began the construction of a solar park in the town of Devnya with a capacity of 5 MWp. By the end of 2010, Alfa Energy Holding is planning to build 2 more photovoltaic parks with a minimum planned capacity of 20 MWp.

TELECOM - Russian billionaire and oligarch Vladimir Yevtushenkov is seeking to buy Telekom Austria AG, the company, which owns Bulgaria's first and biggest mobile operator Mtel. Yevtushenkov may be willing to pay “considerably above” market value of 4,5B€. According to the report the deal will be conducted by Russia's financial and telecommunications giant AFK Sistema, in which Yevtushenkov is a majority shareholder with a 62.1% stake.

ITC - The Bulgarian Telecommunications Company, which was recently rebranded as Vivacom, has signed an agreement to sell 50% of its broadcasting division - National Unit Radio and TV Systems (NURTS) - to international financial investor Mancelord Limited. The price of the deal has not been disclosed, but according to insiders ORS paid 80M€ for a majority share in the company and pledged to invest another 51M€ in an upgrade of the radio and television towers.

FOREIGN DIRECT INVESTMENTS - The Greek group of companies GEK TERNA intends to invest about 500M€ in real estate development and energy production in Bulgaria over next 1-2 years. 80% of the major real estate project of GEK TERNA’s Bulgarian subsidiary ICON, named “3TOPS” and located on the Bulgaria Blvd has been sold out. The downtown skyscraper-type business center “City Tower” currently constructed by GEK TERNA is expected to be completed in 2-3 years.

TELECOM - Regional satellite TV provider Total TV, part of private equity investment firm Mid Europa Partners, announced plans to invest 45M€ in Bulgaria. The investment will include the takeover of ITV Partner, the repayment of its debt and expenditures on its development. The acquisition means that ITV Partner thousands of subscribers will gain immediate access to the satellite platform of Total TV.

INVESTMENTS - Investments in Bulgaria’s industrial sector are down by 34% in 2009 compared to 2008. The data, collected through March 2010, further shows a forecast of another 14% reduction in 2010. Managers from the private sector forsee a 30% decrease in their investment programs while the public sector expects an increase of about 40%.

FOREIGN DIRECT INVESTMENTS - Sweden's Bonnier Business Press announced it has wrapped up the acquisition of 100% stake in Bulgarian business daily Pari. Bonnier Business Press publishes newspapers, magazines and books in Sweden, Denmark, Poland, Slovenia, Russia, Austria, Lithuania, Latvia, and Estonia.

GDP FORECAST - Recession in Bulgaria is to continue at least until the end of 2010, analysts from the Italian UniCredit bank, which owns the Bulgarian Bulbank, forecast. Bulgaria's recovery will be seen at the end of the year, at the earliest, and even in 2011, with the GDP remaining negative until then. The UniCredit Group economists see the slump in the housing market as the main reason for the recession where prices have gone down 30%. However, in many regions, the real estate market shows trends of stabilization.

ENERGY SECTOR - Bulgarian company Real States has given the go-ahead to the construction of an 80 MW photovoltaic energy park worth some 200M€ near the southern city of Pazardzhik. The project will be funded by unnamed European commercial banks and is expected to create 250 jobs. The park is scheduled to be constructed in three phases up to 2014 and will spread over an area of 2000 decares. The first-stage of the project envisages the opening of a photovoltaic facility with a nominal capacity of 1150 KW.

CONSTRUCTION - Knauf, the German supplier of construction materials and local company Technogips announced they have put into operation part of their plasterboard plants near the power complex Maritsa East. The plants will use the by-product from the flue gas desulphurisation operations of nearby power complex Maritsa East. The projects of Knauf and Technogips are worth 61M€ and 49M€ respectively.

March 2010

GDP DEVELOPMENT - Bulgarian economy shrunk 6,5% during 2009. Consumption plunged by 10,6% y-o-y in the Q3/2009 compared to 3,7 % y-o-y in Q2/2009. The World Bank forecasts the GDP growth to be -2% during 2010.

CAR SALES – New passenger car registrations in Jan-February 2010 decreased y-o-y by 46%.

EURO – Bulgaria, whose budget deficit for 2009 was the smallest among the EU27, will apply in March 2010 to join the exchange-rate mechanism, the two-year currency stability test prior to euro adoption, and seek to switch to the common currency by 2013. The largest challenge for Bulgaria is to rein inflation to meet the Maastricht criteria.

TEXTILES INDUSTRY - Hugo Boss has closed its US suit plant in Cleveland in favor of moving production to "low-wage plants" in Bulgaria, Turkey and Romania. The Cleveland suit plant will close its doors in April, ending about 300 jobs there.

RETAIL - Penny Market (Rewe Group), German soft discounter with an aggressive growth strategy for Bulgaria, announced it wants to build a 50-unit network in the country by the end of the year.

MEDIA - Central European Media Enterprises is in the final stage of signing a deal believed to be worth 500 M€ for the acquisition of Bulgaria's first national private television bTV, which is wholly owned by Rupert Murdoch's News Corp.

REAL ESTATE - The construction of Captain Ford Business Center, a new business center described as the first Bulgarian skyscraper started in Sofia. The investment into the two buildings, out of which one will have 36 floor and stretch 126 meters, will be worth some 60 M€.

AUTOMOTIVE INDUSTRY - A British investment fund is going to invest 51 M€ into an electric car factory in Stara Zagora. The electric cars to be produced have the capacity to reach a maximum speed of 110 km/h.

RETAIL - German retailer Tengelmann has confirmed it is in talks to sell its discount retail chains in Romania and Bulgaria to its rival Lidl, which is part of Germany's Schwarz retail group. Tengelman, the parent company of Plus, owns 94 and 16 stores in Romania and Bulgaria respectively.

REAL ESTATE - As much as 300 M€ will be invested during 2010-2011 by Poland's GTC in four malls in Bulgaria. The shopping centers, named Galleria, are under construction in Stara Zagora (26 000 m2), Varna (38 000 m2) and Burgas (37 000 m2) but the project in Ruse has been put on hold for now.

January 2010

FOREIGN DIRECT INVESTMENTS – FDI to Bulgaria in 2009 are going to be less than 50% of the 6,5 B€ the country attracted in 2008. Preliminary data shows that in January-August 2009 Bulgaria attracted only 1,9 B€ in FDI (5,8% of the GDP), which is EUR 2,3 B€ less than in the same period of 2008. In the recent Global Venture Capital and Private Equity Country Attractiveness Index Bulgaria was ranked 55th out of 66 countries, whereas in 2006 the country ranked 48th.

GDP DEVELOPMENT - Bulgarian economy is expected to continue contracting in 2010. The most recent estimates for the contraction are 6.3% for 2009 and 1.5-2.5% in 2010.

EURO – Bulgaria will apply early this year to join the exchange-rate mechanism, the two-year currency stability test prior to euro adoption, and seek to switch to the common currency in 2013.

EXPORT - Export-oriented public companies will be the first to improve their financial results after the crisis. Two of the Bulgarian public companies performing well abroad are pharmaceutical company Sopharma (sales income rose 3 M€ to 180 M€ for the nine months of 2009) and lead battery producer Monbat (export income stood at 32 M€ for Jul-Sep).

AUTOMOTIVE INDUSTRY - UniCredit Leasing's subsidiary BA Creditanstalt Bulus bought former Varna-based automobile maker Rodacar’s plant from Equest Investments Balkans for 10 M€.

AUTOMOTIVE INDUSTRY - The Bulgarian company Litex Motors and the Chinese company Great Wall are going ahead with their 80 M€ joint venture to open a new car factory in Lovech.

MINING - Canadian Euromax Resources Ltd. has started drilling for gold near the Bulgarian towns of Breznik and Trun.

LOGISTICS - Bulgarian Property Developments will invest 13 M€ in a logistic park in Ruse. Out of the sum 2 M€ has already been invested. The park will consist of three buildings in Ruse's new industrial zone on an area of 54 000 m2.

LOGISTICS - Belgian Univeg, company , dealing with retail distribution of fresh and frozen products, will construct a 8 000 m2 warehouse to offer cross-docking possibilities in Sofia. One-fifth of the total space of will be dedicated to frozen products.

GLASS INDUSTRY - The Chinese state-owned company China Luoyang Float Glass Group is still interested in investing in the former glass factory in Bulgaria’s northeast city of Razgrad. In April 2008 Chinise holding was going to invest 80 M€ in the former “Diamond” factory in Razgard.

FOOD INDUSTRY - Advent International, the global private equity firm, announced it has submitted for approval by the state financial commission a buyout offer to minority shareholders of the country's leading water bottling company Devin. At the same time Armenian businessman Gagik Tsarukyan has bought Bulgarian water bottling company Gorna Banya in a 25 M€ deal.

MEDIA - Oesterreichische Rundfunksender (ORS) has renewed its offer for the acquisition of National Unit Radio and TV Systems, which was recently rebranded as Vivacom. The price of the deal was not disclosed, but according to insiders ORS paid 80 M€ for a majority share in the company and pledged to invest another 51 M€ into upgrading of the radio and television towers.

ENERGY - Austrian EVN AG, the electric distribution company, plans to invest 71 M€ in Bulgaria this year.

ENERGY - Poseidon, a joint venture of Greek Depa and Italian Edison, was to control a 50 % stake in the new 170 km gas connection between Bulgaria and Greece. The project was estimated at around 120 M€.

RETAIL - Penny Market planned to open 20-30 stores in 2009 and comparable amount in 2010. The first stores to open doors for customers will be in Sofia, Botevgrad, Vratsa, and Nova Zagora.

RETAIL - Slovenian chain Mercator opened its first store – a 2000 m2 hypermarket in Stara Zagora, which took six months and 3 M€ to build. Mercator expects its initial expansion drive in Bulgaria to cost 40 M€.

BEWERAGES INDUSTRY - Private equity firm CVC Capital Partners bought the Central and Eastern European operations of world's biggest brewer Anheuser-Busch InBev, including Bulgarian brewer Kamenitza. CVC will pay 1,1 B€ in cash and assume 310 M€ in debt.

FURNITURE - Fourlis Holdings, the Ikea franchise-holder for Greece, Cyprus and Bulgaria, plans to open its first Bulgaria store by 2013.

TELECOM - Bulgaria’s mobile phone market has been the 7th most dynamic in the world in 2003-08, according to the 2009 Information Economy Report of the by the UN. Mobile phone penetration in Bulgaria was estimated at 142% of total population at the end of 2008, with user numbers topping 10,8 M after increasing by an average of over 30% annually in the period between 2003 and 2008.

TELECOM - The Swedish investment fund EQT has acquired 100% of Eurocom and 70% of Cabletel, both Bulgaria's major cable operators. The deal involves 210 M€ of which 120 M€ went for the acquisition while 46 M€ are slated for future investments.

September 2009

COMPETITIVENESS – In the World Bank Global Competitiveness Survey Bulgaria stayed in the 76th place making it the least competitive country in the industrialized world.

NON-PERFORMING LOANS – The share of non-performing loans climbed to over 5% at the end of July and models predict that if the IMF forecast of -7% GDP growth in 2009 will materialize the share of bad loans will raise to over 16%. At the same time the average consumer loan interest rate is roughly 14%.

LIQUIDITY PROBLEMS – One in six Bulgarian companies are facing liquidity problems caused by delayed payments from customers or partners. Only small comfort is that in Hungary the ratio is one out of three.

FOOD INDUSTRY - Kraft Foods has invested 40 M levas in a chocolate factory in selected Sofia as the city for its regional HQ

ENERGY - German utility company RWE continues with nuclear station at Belene. Earlier RWE was considering a complete withdrawal from the project due to rising costs and is still considering to sell some of the 49% it is to have in the new plant. Also Bulgarian state is looking for investors to buy part of its 51%.

June 2009

COMPETITIVENESS – Bulgaria was ranked by PwC the second most competitive country globally for manufacturing and fourth for services. In both areas Bulgaria was assessed higher than e.g. China and India.

ENERGY –American energy company AES will invest 270 M€ into building a wind park near the town of Kavarna. Earlier AES had invested already 1,2 bn € into a thermoelectric power plant of 670 MW near Stara Zagora. With the additional investment AES is the largest foreign investor in the country.

MEDICAL - A Slovakian company has selected Bulgaria from the last three contestants as the location for four facilities producing equipment for preparation and transportation of blood plasma. The total budget for the investment is nearly 600 M€.

ENERGY - US company Doich International will build a 170 M$, 20 MW eco energy plant close to village of Dralfa. The plant will utilize households as its energy source.

March 2009

UNEMPLOYMENT – Unemployment in Bulgaria reached in 2008 18 year low with 18,6% of the workforce being unemployed.

RETAIL –Piccadilly, which has since 2007 been in Serbian ownership, said it will open 20 corner shops in Sofia by the end of 2009. Additionally a further 20 supermarkets sized 2 000-4 000 m2 will be added to the chain’s current network of 17 stores across the country.

PHARMACEUTICALS - Actavis Bulgaria, is going to invest 60 M€ into two new workshops in its existing factory. The capacity of the new workshops will be about 5 bn tablets per year.

AUTOMOTIVE - German WITTE Automotive is preparing the construction of a factory in Rousse, which would employ 300 people. The first step is to launch a programme to select specialists among Rousse University graduates. The company will send the selected students to practice in Germany, which is partly financed under the EU Socrates / Erasmus programme.

December 2008

ECONOMIC GROWTH - The Bulgarian economy is forecasted to contract 1.2 % in 2009 and 0.3 % in 2010.

EURO ADOPTION - Bulgarian economy has been assessed to be in the weakest state across Central and Eastern Europe. The fears of economic shock have lead to active discussion about adoption of euro. The debate has not gone unnoticed by the European Commission which has denied the possibility of such alternative.

CORRUPTION - Bulgaria loses 220 M EUR and another 340 M EUR are under question as a result of the decision of the European Commission not to unfreeze the aid for the country because of fraud and corruption. The decision has raised voices about premature acceptance of both Bulgaria and Romania to the EU.

TELECOMMUNICATION - Ericsson announced the opening of its new logistics centre. Ericsson's Central Order Desk will cover 11 countries from South-Eastern Europe by processing 65% of all orders to the company and coordinating 100% of all complaints.

PC - The PC market has continued to grow strongly in Q3/2008 as the number of units sold jumped 72.6% and sales revenue 44.6% higher y-o-y.

RETAIL - Central Mall Pleven, the first commercial and recreation centre in Pleven, was opened after a 12.5 M EUR construction works were finished. The mall is reported to have 95% of its floor space rented out.

FOOD INDUSTRY - Kraft Foods moves chocolate production from Romania to Bulgaria despite having invested 30 M EUR into the Romanian plant.

October 2008

ECONOMY - According to EBRD analysis, Bulgaria is one of the countries in Eastern Europe whose economy will avoid a recession and the devaluation of its currency.

ELECTRONICS - 2be, a Bulgarian consumer electronics retailer, announced that it will open 13 shops in neighboring Macedonia.

ALTERNATIVE ENERGY - About 500 M EUR is estimated to be invested into wind farms in northeastern Bulgaria by the end of 2009, Velizar Kiryakov, chairperson of the association of eco energy producers, has said. Another 51 M EUR will be spent on solar power generation.

REAL ESTATE - Real estate company Willbrook Management International will by 2009 build a 40 M EUR housing complex in Varna, which will also be Bulgaria's first green project.

August 2008

BUSINESS ENVIRONMENT - Bulgaria advanced 24 positions to 44th in Forbes' third annual ranking of Best Countries for Business.

INFLATION - Inflation rose to 10-year high of 15.3% in June.

INDUSTRIAL ZONES - 100 industrial zones are planned to be build under Bulgaria's export strategy for the 2008-2013 period. The effort will be backed with a disbursement of 51 M EUR annually. The ministry estimates the average cost per industrial zone at around 3 M EUR.

ICT - The value of computer and telecom hardware supplies rose 17% on the year to 269 M$ in Q1/2008.

ENERGY - Karnobat will construct a 150 M EUR wind and solar energy park by end of 2008.

RECYCLING - Varna-based company Mega Group said it would invest some 100 M EUR over the next couple of years to a plant for recycling of oil and petroleum waste.

AUTOMOTIVE - Bulgaria reported the second-fastest growth rate in terms of new passenger car registrations in 1H/2008. Bulgaria's y-o-y growth rate of 20.5% was beaten only by Lithuania's 36.2%. Slovakia was tucked into third place with 19.3%.

RETAIL - Metro Cash&Carry, the German retail chain, has started construction works on a second outlet. The new hypermarket will be the company's 11th in Bulgaria. The outlet, with a price tag of around 40 M EUR, will have 10 000 m2, including 7 500 m2 of retail space and will stock over 60 000 items. The company said it has also bought a site for a new outlet in Sofia, where it already has two stores.

MEDIA - Central European Media Enterprises announced that it had invested 110 M EUR to acquire 80% of two Bulgarian TV stations.

ENERGY - AES Geo Energy plans to build a 201MW wind farm. The investor will first install 51 wind turbines with a combined capacity of 156MW. Another 15 turbines will be added during the second phase of the project. The facility should be operational by 2010.

May 2008

ECONOMIC DEVELOPMENT - Eurostat found Bulgaria to be the cheapest country in the West Balkans and in the EU. The research draws on 2006 statistical data provided by the National Statistical Institute. Bulgaria's prices are on a par with those in Serbia and Macedonia. Romania, Montenegro and Albania came up with an index that is 10 points higher than in Bulgaria.

RETAIL - IKEA plans to build three hypermarkets in Bulgaria. They are to be opened between 2009 and 2011. In its first move toward entry in Bulgaria, in early 2008 it bought a land plot in Sofia.

RETAIL - French travel and high street retailer Lagardere Service is planning direct entry into Bulgaria. Plans are to open the first Lagardere-branded shops this year.

OIL - LUKoil, the Russian oil company, bought from Petrol, Bulgarian fuel retailer, a chain of 75 gas stations and the fuel depot used for servicing the stations for 237 M EUR.

CONSTRUCTION MATERIALS - The Bulgarian company Devnia Cement is to shortly launch the construction of a 250 M EUR plant, the company said in a statement. The new plant will have an annual capacity of three million tons a year and is slated to start operations in early 2010. In addition, the new factory will have a special rigid household waste-burning facility. To cure cement, the plant needs to burn about 200 000 tons of waste.

TECHNOLOGY - US diversified holdings company ITT announced plans to invest $400 million in Bulgaria, mostly in the construction of new production facilities. According to sources familiar with ITT plans, the US company will eye Bulgarian army modernization projects, namely the deployment of tactical communication-information systems for the general staff, ground, air and naval forces.

CORRUPTION - Bulgaria and Romania are on the rack in the European Union over their alleged failure to fight corruption and implement judicial reforms. Bulgaria faces further complaints over its record in dealing with rampant organised crime.

March 2008

ECONOMIC DEVELOPMENT - FDI in Bulgaria soared last year 30% to EUR 5.7 bln. The share of FDI as a percentage of the GDP rose from 17.4% in 2006 to 19.9% last year. In December 2007 alone, FDI flows were up 11.5% on the year to EUR 556 mln, whereas in Q4/2007 it grew by 13.9% y-o-y to EUR 1.57 bln. Venture capital formed 59.3% of overall FDI. Revenues from the sale of real estate to foreigners soared to EUR 1.7 bln last year (EUR 1.15 bln in 2006). FDI covered 92.1% of the current account gap last year, down from 110.9% in 2006. The high deficit, 20.5% of GDP at the end of 2007, makes Bulgaria vulnerable to a hard landing should the global credit crunch curtail FDI flow. The Finance Minister Plamen Oresharski, however, assured that Bulgaria is not in danger of financial crunch as the budget includes solid fiscal reserves and a strong surplus.

LOGISTICS - Japan will lend Bulgaria EUR 238 mln for the construction of two terminals handling container ships in its Black Sea ports of Bourgas and Varna. The terminals will be built by 2015. The loan will further strengthen the economic ties between the two countries, as well as boost co-operation in the Black Sea region.

ENERGY - Spanish company Coener Group plans to invest more than EUR 60 mln in Northern Bulgaria into a bio-diesel refinery, an installation for raw refined oil, a warehouse and a new port on the Danube. The complex is due to be completed in 2009.

CONSTRUCTION MATERIALS - The French-German conglomerate Saint-Gobain Weber will build a greenfield factory for mortar and paste-like coatings in Southern Bulgaria. The company will invest EUR 5 mln in the project, which would be completed within six months.

RETAIL - British clothing retailer Marks&Spencer set up a joint venture with the Greek Marinopoulos Group to expand its business in Eastern Europe. The British company acquired 50% of Marks&Spencer Marinopoulos BV, which manages 38 outlets under franchise in Greece, Romania, Bulgaria and Switzerland, for EUR 50 mln. Marks&Spencer plans to open 50 new outlets on the Balkans in the coming years.

January 2008

SCHENGEN - Bulgaria could join Schengen in 2010- 2011. On December 21 2007, the Czech Republic, Estonia, Hungary, Latvia. Lithuania, Malta, Poland, Slovakia and Slovenia joined the Schengen Treaty. Four-hundred million citizens can freely travel the new 24 country area. According to Bulgarian Foreign Minister Ivaylo Kalfin, Bulgaria and Romania could join Schengen in 2010 or 2011.

REAL ESTATE - Property prices in Bulgaria were the fastest growing in the world, according to the Knight Frank ranking. The company's index, Knight Frank Global Price Index, showed that residential property prices in Bulgaria rose by 30.6 per cent on the year in Q3 2007. In Q3 2006 Bulgaria was eighth in the ranking with a price increase of 14 per cent.

REAL ESTATE - Austrian business property investment company ECO Business-Immobilien AG said it was considering investing in Bulgarian property market. The company was evaluating properties in Ukraine, Bulgaria and Romania, the company media statement said. On December 3 2007, ECO Business-Immobilien announced its first investment in Ukraine worth 18.1 million euro. The company would construct a 19-storey, 14 000 square meter office complex. The project is to be completed by the end of 2008.